Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

I think my colleagues are just amazed that the government would not have been more forthright and more determined in fixing this absolutely terrible national disgrace which is the current process by which the default funds are selected by Fair Work Australia under modern awards.

Here we have a government which at the same time are legislating what they say are the conditions that are required to ensure that a particular default product complies with all of the consumer protection requirements that the government judge are necessary, but then they say, 'We don't really trust the criteria that we have determined in legislation because we think that, after all that has happened, and even though some products are adequate enough and are so good that they comply with all of these conditions of registration, we think that there is a desperate need for another process, still through Fair Work Australia, to run another ruler over it.' Additional costs, additional inefficiency, additional red tape. What for? If you think that your MySuper legislation is inadequate, fix it. Do not come in here and say, 'Once you are able to register your MySuper products, we think you are still not good enough to be able to provide default fund products under modern awards.'

Here we have Minister Shorten—having commissioned a review eventually, after a lot of pushing and shoving, after it is recommended in his initial draft report that there should be genuine competition—bullying them into a position where they back away from it and make a watered-down recommendation. But then even that watered-down recommendation, after the bullying from Minister Shorten, he still does not go along with. Here we have a situation now where the government has introduced legislation into the parliament, in the form of these bills, which instead of ensuring genuine competition will impose an additional layer of government intervention in the default fund market. The government is also seeking to limit the number of MySuper products in modern awards to just 10, contrary even to the clear but weakened recommendation of the Productivity Commission, which was that there should be an unlimited list of default funds.

In fact, the government has ignored the Productivity Commission's final weakened recommendations in a number of other areas. The Productivity Commission's proposed default superannuation panel will not be created, as recommended. Rather it will be subsumed into the existing minimum wage panel. The new panel is not the final decision maker under this bill, as recommended. The full bench of Fair Work Australia will approve default funds in each award after recommendation from the expert panel. There is the process of including funds in awards occurring every four years, starting in 2014, when modern awards are due for review, as opposed to an ongoing application process. All awards must have default funds, when currently there are 13 awards that do not list default funds at all.

Genuine competition in the default fund market, as I mentioned, is critically important to ensure that efficiencies and value for Australians in default super are maximised. Instead, this bill, if passed by the parliament, would see the continuation of a process where conflicted parties within Fair Work Australia will continue to select default super funds under modern awards. That is completely unsatisfactory, which is why the coalition will be moving a number of amendments to ensure that there is genuine competition between any eligible MySuper default products in the market.

Bill Shorten has been so desperate to protect the vested interests of his friends in the union movement that in our view he has lost sight of his responsibility as a minister of the Crown to act in the public interest, which is why we on the coalition side have said that, if the government will not do what needs to be done to right the wrong, the coalition will. We are moving these amendments in order to give the Senate the opportunity to join us in doing the right thing. If the Senate does not go along with us today, because the Labor Party continues to persist with its conflicted ways, seeking to provide competitive advantages that are close to them in the financial services market, then we in government will do the right thing and we will move to ensure that there is genuine competition in the default fund market.

There are many other problems with this bill. It does not go far enough in a number of areas. But other colleagues of mine who have direct responsibility for these areas have spoken on these matters very eloquently—of course led by our leader, Senator Abetz, who has portfolio responsibility in this area. But as far as my area of policy responsibility in relation to superannuation is concerned, let me just make very clear that this legislation provides an opportunity for us to ensure that there is genuine competition between default funds under modern awards, which is something that is manifestly in the public interest, which is something that the Senate should pursue today, because today is the opportunity when we can make it happen. In years to come, if we get it wrong today, people will ask the question: 'Why did you not vote to ensure that I had genuine choice and had the benefits of genuine competition in the default fund market? Why did you vote to not allow me to have all of the benefits that come from a genuine competition in this market?'

With those few words, I will be moving a series of amendments on behalf of the coalition in this area. I am hopeful that the Senate will see fit to support them. I will leave all other matters in relation to this particular bill to Senator Abetz and my other colleagues.